Press Story

FOR IMMEDIATE RELEASE

Scotland risks sliding back into austerity if political leaders do not revisit the current public services reform strategy, a new IPPR Scotland report – More for Less? Employment, Productivity and Reform in Scottish Public Services - warns.

The think tank’s analysis finds that the Scottish government’s existing policy framework for public service reform is “not fit for purpose”, with multiple strategies pulling in contradictory directions and failing to offer a coherent route to sustainable, high‑quality services and lower costs.

The report describes the fiscal challenge as “real, immediate and significant” but questions the value and relevance of the current target to cut public sector jobs.

The Scottish government has committed to protect ‘frontline’ jobs but failed to explain what that means. Should teacher numbers hold constant and the NHS workforce keep pace with demand, this could mean as many as 20,000 jobs will be cut from other areas by the end of the decade.
That is about as many jobs as were lost from local government in the first five years of 2010s austerity.
It is highly unlikely that these job cuts can be achieved without damaging public services.

The report notes that the consequences of 2010s austerity measures were far-reaching; most notably, healthy life expectancy stopped improving. This increased “failure demand” – pressure on public services arising from issues that could have been prevented. While politicians continue to pay lip-service to the importance of preventative spend, the reality of cutting public services today to meet an arbitrary workforce target brings serious risks of deepening the dynamic of ‘save today, only to spend tomorrow’.

The report challenges the proposition that recent increases in public sector employment signal inefficiency or bloat. Instead, it shows that this growth has been driven by rising demand and structural changes such as:

The growing health needs of an ageing population
Responsibilities transferred from Brussels to the Scottish government after Brexit
Delivery of free early learning hours

The report also finds that median public sector pay in Scotland remains below pre-austerity levels and argues that lower pay elsewhere in the UK is hardly compelling evidence that Scottish pay is excessive.

Ahead of the upcoming election, IPPR Scotland has urged all political parties to have an open and honest debate about the future of public services and the taxation needed to sustain them. It also calls on the government to finally start making rapid progress in implementing the Christie Commission’s recommendations.

IPPR Scotland director Stephen Boyd said:

"With a Scottish election approaching, voters deserve a more honest debate about the future of public services, and the taxation needed to sustain them. After all, excellent public services are not a luxury; they are the bedrock of a thriving society. No party has come close to presenting a detailed, costed plan for meeting the looming fiscal gap. Assuming it can be closed through pain-free efficiency measures isn’t remotely credible. Scotland’s voters deserve better."

AVAILABLE FOR INTERVIEWS:

Stephen Boyd, director of IPPR Scotland, and Dave Hawkey, senior research fellow, are available for interviews. Stephen is based in Glasgow and Dave is based in Edinburgh.

CONTACT:

Sukhada Tatke, media and impact officer at IPPR Scotland: s.tatke@ippr.org; 07901169121

NOTE TO EDITORS:

IPPR Scotland shapes public policy in pursuit of a fairer, greener, more prosperous Scotland.
IPPR Scotland published a series of blogs in the run-up to this report. The first one looked at teacher pay per pupil in Scotland; in the second blog, we turned to William Baumol to explain why it pays to be cautious about rapid productivity growth/lower costs in people driven services. The third one considered the limits of new technology in making healthcare cheaper and the fourth blog shone a light on what public servants had to say about public services.
The report’s findings also include:
-The UK reduced public sector employment more than other OECD countries in the 2010s (see figure 3.1).
- The pandemic saw an increase in NHS employment, but on our demography-adjusted measure this put staffing just 4 per cent above its pre-austerity level.
- The trends in local government employment vary significantly by occupation: the expansion in childcare services accounts for an increase of around 7,500 FTE staff since 2010. Adult social services and teachers are at levels close to 2010. This leaves the rest of local government around 12,500 FTE members of staff below 2010 levels. Outside local government, the NHS and the civil service, there are only around 65,000 public sector workers, and it seems implausible that all 18,000 job losses (representing nearly a quarter of these workers) could be absorbed here. With just under 15,000 workers employed in so-called quangos, even deep cuts in this area would fall short of the 0.5 per cent target.
The report is available to download at https://www.ippr.org/articles/more-for-less-scottish-public-services